03047cam a22003377 4500001000700000003000500007005001700012008004100029100001600070245010500086260006600191490004200257500001700299520134300316530006101659538007201720538003601792690008801828690013701916690006602053690007502119690011002194690007602304690009502380700002102475700001902496710004202515830007702557856003802634856003702672w21458NBER20190915091238.0190915s2015 mau||||fs|||| 000 0 eng d1 aKerr, Sari.10aHouse Money and Entrepreneurshiph[electronic resource] /cSari Kerr, William R. Kerr, Ramana Nanda. aCambridge, Mass.bNational Bureau of Economic Researchc2015.1 aNBER working paper seriesvno. w21458 aAugust 2015.3 aWe examine the relationship between house prices and entrepreneurship using micro data from the US Census Bureau. Increases in house prices are often thought to drive entrepreneurship through unlocking the collateral channel for bank loans, but this interpretation is challenged by worries regarding omitted variable biases (e.g., rising local demand) or wealth effects (i.e., that people with more valuable homes are more likely to enter entrepreneurship for reasons other than access to collateral). We construct an empirical environment that utilizes very localized price changes, exploits variations in initial home values across residents in the same zip code, and embeds multiple comparisons (e.g., owners vs. renters, homestead exemption laws by state). For the United States during the 2000-2004 period, the link of home prices to the rate of entrepreneurship through home equity channels is modest in economic magnitude. This is despite a focus on a time period that experienced the largest concentration of US home price growth over the last two decades. Even when we do connect home equity to entrepreneurship, part of the effect is linked to an increased demand for entrepreneurship. While housing collateral plays a role in the entry that we observe, it does not seem to be a major barrier to entrepreneurship in our context. aHardcopy version available to institutional subscribers. aSystem requirements: Adobe [Acrobat] Reader required for PDF files. aMode of access: World Wide Web. 7aE44 - Financial Markets and the Macroeconomy2Journal of Economic Literature class. 7aG21 - Banks • Depository Institutions • Micro Finance Institutions • Mortgages2Journal of Economic Literature class. 7aL26 - Entrepreneurship2Journal of Economic Literature class. 7aM13 - New Firms • Startups2Journal of Economic Literature class. 7aR12 - Size and Spatial Distributions of Regional Economic Activity2Journal of Economic Literature class. 7aR31 - Housing Supply and Markets2Journal of Economic Literature class. 7aR32 - Other Spatial Production and Pricing Analysis2Journal of Economic Literature class.1 aKerr, William R.1 aNanda, Ramana.2 aNational Bureau of Economic Research. 0aWorking Paper Series (National Bureau of Economic Research)vno. w21458.4 uhttp://www.nber.org/papers/w2145841uhttp://dx.doi.org/10.3386/w21458